FCA prohibits debt packager remuneration from debt solution providers

The Financial Conduct Authority's rule CONC 8.3.11R came into force on 2 June 2023, prohibiting firms from receiving commission, fees or any other financial consideration, directly or indirectly, from a debt solution provider in connection with referrals or related services¹. The rule sits in CONC 8, the part of the FCA Handbook covering debt advice and debt management firms¹.

The prohibition applies to a firm and requires it to take all reasonable steps to ensure that none of its associates or appointed representatives enters into an agreement to receive, solicits or accepts, or seeks to exercise, enforce or rely on rights under an agreement to receive such payment¹. The rule states:

There are limited exceptions. CONC 8.3.11R does not apply to payments made under an enactment, or to payments relating to administration by a "money adviser" approved under The Debt Arrangement Scheme (Scotland) Regulations 2011¹. The parts of the rule covering soliciting or accepting payment and enforcing rights to it do not apply where a firm had an accrued contractual right to payment for the referral, or related services, in relation to a customer before the rule came into force¹.

CONC 8 applies to every firm carrying on debt counselling, debt adjusting or providing credit information services, and covers profit-seeking as well as not-for-profit bodies holding those permissions¹. The activities of debt counselling and debt adjusting apply to credit agreements and consumer hire agreements whether or not they are regulated¹. The FCA's guidance states that one aspect of conducting business with due skill, care and diligence is that a firm should ensure it gives appropriate advice to customers residing in the different countries of the UK, and that failing to pay proper regard to differences in the debt solutions available and in enforcement actions and procedures is likely to breach Principle 2¹.

Separately, a debt management firm must prominently include in its first written or oral communication with a customer a statement that free debt counselling, debt adjusting and provision of credit information services is available, and must carry a link to the MoneyHelper debt advice locator on its website¹. Firms must also have clear and effective policies and procedures to identify particularly vulnerable customers and deal with them appropriately¹.

Why it matters for households

The ban removes a payment route that ran between firms referring people with problem debts and the providers of debt solutions. From 2 June 2023, a firm covered by CONC 8 cannot be paid by a debt solution provider for a referral, and cannot solicit or accept such payment, whether directly or indirectly, or through an associate or appointed representative¹. The exception for accrued contractual rights means some pre-existing payment arrangements were preserved, but only where the right to payment had already accrued before the rule took effect¹.

The rule applies across the UK, but the FCA's guidance notes that debt solutions, enforcement actions and procedures differ between the countries of the UK, and that advice failing to take account of those differences is likely to breach Principle 2¹. The Scottish Debt Arrangement Scheme is carved out of the ban for payments to approved money advisers¹.

Other protections in CONC 8 are unchanged by the ban. A firm must provide sufficient information in a durable medium when a customer first enquires about its services, must carry out a reasonable and reliable assessment of the customer's circumstances before giving advice or a recommendation on a course of action, and must provide advice in a durable medium¹. A firm may be required to refund fees and charges in whole or in part if it fails to deliver its service in whole or in part, or has carried out the service without reasonable care and skill¹. Debt management firms must signpost free advice from their first contact with a customer¹.

What happens next

The rule took effect on 2 June 2023 and remains in the Handbook, which was last updated on 31 July 2026¹. No further commencement dates for CONC 8.3.11R are set out in the chapter.